Bitcoin briefly surged to $112,000 on Friday after softer-than-expected U.S. inflation data boosted risk sentiment and sent the S&P 500 to new all-time highs. However, BTC later reversed gains as traders grappled with thin liquidity and sell-side pressure at the Wall Street open.Key TakeawaysBitcoin hit $112,000 after U.S. CPI data came in below forecasts, but failed to hold gains.S&P 500 set a record high on expectations of continued Federal Reserve rate cuts through 2026.BTC faces resistance at $112,000 and needs to reclaim key support at its 21-day and 55-day EMAs.Market sentiment remains cautious despite optimism in traditional risk assets.U.S. CPI Miss Sparks Risk RallyThe September Consumer Price Index (CPI) report came in cooler than expected, showing both headline and core inflation readings 0.1% below forecasts, hovering near 3%, according to data from the U.S. Bureau of Labor Statistics (BLS).The softer print fueled optimism that the Federal Reserve will continue cutting interest rates through next year.The CME FedWatch Tool now shows traders overwhelmingly pricing in a 0.25% rate cut at the upcoming Oct. 29 FOMC meeting.“This report paves the path for another Fed rate cut next week,” said trading publication The Kobeissi Letter, noting the data release was “a rare exception” during the ongoing government shutdown.Stocks reacted sharply: the S&P 500 hit a fresh all-time high, while analysts from Mosaic Asset Company said looser financial conditions should “support the economy and corporate earnings” heading into 2026.Bitcoin Fails to Follow Stocks HigherDespite the positive macro backdrop, Bitcoin’s gains quickly faded.Data from Cointelegraph Markets Pro and TradingView showed BTC rising to $112,000 before sliding back below $111,000 during U.S. trading hours.Analysts said sell-side pressure and thin order books continue to weigh on short-term sentiment.“$BTC has a thin bid side on perpetuals — it can dump quickly,” trader Exitpump warned on X.Meanwhile, trader Diego White described order book conditions as “heavy,” pointing to new buy-side liquidity clusters forming around $110,000, according to CoinGlass.Key Technical Levels to WatchCubic Analytics founder Caleb Franzen said Bitcoin is currently bouncing off the 200-day EMA, but needs to reclaim and close above the 21-day and 55-day EMAs to confirm a stronger trend reversal.“BTC is rebounding on the 200-day EMA so far, but it needs to break and close above the 21/55-day levels, which acted as resistance during this week’s retest,” Franzen wrote on X.For now, $112,000 remains a major resistance, while the $110,000–$109,000 zone serves as the next line of support.Market OutlookWhile inflation relief and rate-cut expectations have lifted risk assets broadly, crypto traders remain cautious amid low conviction and fading volatility.Bitcoin’s inability to mirror the stock market’s rally highlights ongoing demand-side fragility and liquidity stress in crypto markets.Still, analysts suggest that sustained macro optimism and easier monetary conditions could reignite Bitcoin’s momentum later this quarter — provided BTC defends key support levels above $109,000.
Davin
Kikyo
Hui Xin
Catherine
Clement